CALGARY, Alberta Jan 11 Canadian oil sands
producer MEG Energy's 2017 capital budget will be
nearly four times higher than last year's spending, the company
said in a statement on Wednesday that also outlined plans to
refinance its debt.
Calgary-based MEG plans to spend C$590 million ($447.85
million) this year, up from C$125 million in 2016 when the
company deferred some production growth projects because of low
crude oil prices.
A number of Canadian oil and gas producers have laid out
plans to spend more in 2017 as global crude prices stabilise
above $50 a barrel.
MEG said it will grow production by 20,000 barrels per day
in 2017, a roughly 25 percent increase on current output,
through implementing enhanced thermal technology at its
Christina Lake oil sands project in northern Alberta.
Chief Executive Bill McCaffrey said the technology, which
involves adding gas to steam injected underground to liquefy and
extract tarry oil sands bitumen, will increase production
volumes and improve economic returns.
"When fully implemented, this growth is anticipated to bring
MEG's total production to approximately 100,000 bpd,
significantly improving the sustainability of the business by
driving cash costs down by as much as C$4-5 per barrel,"
MEG also unveiled a refinancing plan, in which the company
will extend maturity dates on its revolving credit facility and
a $1.2 billion term loan, refinance $750 million of unsecured
notes, and raise C$357 million of equity through bought deal
($1 = 1.3174 Canadian dollars)
(Reporting by Nia Williams; Editing by Bernard Orr)